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Dispute resolution is a legal means available to settle an existing dispute, including litigation, arbitration and mediation. Many contracting parties decide to set forth the type of and procedures to be used in resolving any disputes arising out of the performance of the contract. If no means of dispute resolution is identified in the agreement, it is generally assumed that the parties intend to resolve any disputes arising from the contract by litigation.

Sample contract clause

a. In the event of a dispute arising out of or in relation to the terms of this Agreement, representatives of Vendor and Licensee shall meet and endeavor to settle the dispute in an amicable manner through mutual consultation. If such persons are unable to resolve the dispute in a satisfactory manner within ten (10) business days, either party may seek binding arbitration.

b. Upon receipt of written notice by either party calling for arbitration with respect to any dispute arising out of or in relation to the terms of this Agreement, the matter shall be submitted to binding arbitration under the commercial rules of the American Arbitration Association in [designate location], by a single arbitrator appointed by the American Arbitration Association. Insofar as possible, such arbitrator shall be, at the time of his or her selection, a partner or manager of a national or regional accounting firm (including the information processing, management support, and merger and acquisitions operations or affiliates thereof) not regularly employed by Vendor or Licensee. Such arbitrator shall be required to have substantial experience in the field of computer software technology and licensing.

c. A decision of the arbitrator shall be final and binding on the parties and may be entered and enforced in any court of competent jurisdiction by either party.

d. The prevailing party in any arbitration shall be awarded reasonable attorneys’ fees, expert witness costs and expenses, and all other costs and expenses incurred directly or indirectly in connection with the proceedings, unless the arbitrator for good cause determines otherwise.